Brussels, 28/06/2013 (Agence Europe) - The European Summit has postponed until December any decision about the future of economic and monetary union (EMU).
At the end of last year, the EU27 decided to meet up in June 2013 to decide on a roadmap on boosting the economic, social and political wings of EMU. Apart from the Banking Union, another six months will be needed before any progress is seen. Luxembourg's prime minister, Jean-Claude Juncker, said on Friday 28 June at the end of the summit that he was disappointed that such little progress had been made and at the “posturing” by European leaders. Juncker said that the social dimension of EMU was regarded as the poor relation.
The president of the European Council, Herman Van Rompuy, said the summit had discussed the idea of including social and employment indicators (unemployment levels and social dialogue) in the assessment of national budget and economic policies but, in the conclusions document, the EU27 says that the social dimension of EMU will need to be strengthened through a future communication from the European Commission. The Italian prime minister, Enrico Letta, said there would be a meeting in October to examine this issue. He said France, Spain, Germany and Italy had insisted that countries opposed to stronger integration should not be allowed to dominate the others.
Van Rompuy said that the competitiveness contracts (between a member state and Brussels for economic aid to help introduce structural reforms) were “uncharted territory but there was convergence”. One thing is certain - these competitiveness contracts will be voluntary for eurozone nations and will have to respect the integrity of the Single Market. The German chancellor, Angela Markel, said they would meet up in December to decide on the contractual agreements, but a lot of work still needed to be done.
Banking Union. The European Council welcomed recent progress in Banking Union, like the agreement by the ECOFIN Council on the draft directive on bank resolution systems (see EUROPE 10876). Banking Union is on the move, said the Spanish prime minister, Mariano Rajoy. Enda Kenny, the Irish prime minister, said it would “break the vicious circle between banks and public debt”. Mentioning the dark collusion between banks and politicians (as revealed by recent leaks), he said a parliamentary committee was investigating the Anglo Irish Bank (AIB) scandal that had forced Ireland to request international financial aid.
The next stage will be the draft single bank resolution mechanism that the president of the European Commission promised would be unveiled over the next fortnight. Merkel said Germany had drawn attention to the fact that the Commission has no power under the EU treaties to be a bank resolution authority. The Commission feels that it is best placed to do this job, which will be needed at the same time as a special European bank resolution fund is set up.
The EU27 want the European Commission to conclude the restructuring talks under Banking Union before the end of the current European Parliament in spring 2014. In the summer, a review of state aid rules will be unveiled for bank restructuring involving public money.
Letta noted the importance of the summit being attended by the president of the ECB, Mario Draghi, because this had kept up the momentum on Banking Union. He said that the idea of Banking Union had been replaced with the term “integrated financial framework” in the draft conclusions document dated 28 June.
European Semester. The summit endorsed the European Commission's budget policy recommendations for the member states, which have promised to incorporate them in their draft budgets (see EUROPE 10872). (MB with AN/CG/EL/FG/LC/transl.fl)